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Lessors boost Boeing and Airbus February 2000 Download PDF

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New orders in 1999 fell by some 16% over 1998 levels, Airbus outsold Boeing, and the lessors nearly overtook the airlines.

Despite the fact that the number of aircraft delivered by Boeing and Airbus outstripped orders received, backlogs remain healthy. Boeing has some 1,530 aircraft in its backlog (about 3.2 years at this year’s expected rate of production), and Airbus roughly 1, 450 (4.5 years equivalent of estimated year 2000 output).

Boeing delivered some 620 aircraft in 1999, but expects a reduction to 490 aircraft in 2000. Airbus delivered 294 aircraft last year and has announced increased production rates for this year to 307 aircraft, which should rise to about 330 in 2001. So the overall number of aircraft delivered by the "big two" will fall this year as Boeing’s cutback in deliveries far outweighs Airbus’s increase in production. 1999, with some 915 aircraft deliveries between Airbus and Boeing (an increase of 16% on 1998), will certainly represent the peak delivery year of the current cycle.

Although Airbus won the order battle in 1999, Boeing argues that the only way to measure market leadership is by aircraft deliveries. With the two manufacturers enjoying nearly matching orderbooks, and with Airbus increasing production as Boeing slows down, a couple of years more of success on the order front may undermine Boeing’s market leadership even on this measure.

As one would expect, Airbus continues to outperform Boeing in its home patch Europe, and Boeing continues to outperform Airbus in North America. Although the Asian carriers provided understandably slim pickings for the manufacturers in 1999, Boeing fared better than Airbus largely thanks to 747 freighter sales, the famous SIA 777 deals involving the trade–in of A340s, and from Jet Airways for 10 737–800s.

Orders placed by the lessors increased dramatically in 1999. In 1997 lessors accounted for some 15.6% of new orders placed with Airbus and Boeing; in 1998 this figure fell to 13.2%; in 1999 it soared to 43.5%.

There are two diametrically opposed views on the operating lease market at present. One view is that a there has been a fundamental shift in the way airlines will choose to acquire aircraft in the future, that they are increasingly preferring the flexibility that operating leases provide and the off–balance sheet form of funding. The other is that the lessors have been opportunistic in taking advantage in a slowdown in demand from the Asian carriers in securing delivery positions at presumably attractive prices from the manufacturers. The lessors will be relying on a continuation of the Asian recovery plus no industry downturn in the near future if their investments are to prove worthwhile.

Boeing’s goals for 2000 will be to receive launch orders for the long range/high capacity 777–200X and 777–300X aircraft. Certification of the 737–900 in 2001 and 767–400 ER this year will also be a priority.

The manufacturer faces a difficult year. The dearth of orders for both the 757 and 767 models has put into question the likelihood of the manufacturer building new longer–range derivatives of both models, and the 717 has a questionable future unless orders are taken this year.

For Airbus, this year will again be dominated by the A3XX. For deliveries to begin in 2005, Airbus salesmen will be seeking firm commitments for the aircraft this year. But the candidate airlines still seem reluctant to commit, wrangles over the Airbus company structure continue, and financiers are balking at the prospect of betting the company on this one project.

BOEING FIRM ORDERS 1999
BOEING FIRM ORDERS 1999
  717- 737- 737- 737- 737- 747- 747- 757- 767 777 777      
  200 3/4/500 600 700 800 400 400F 200 300ER/F-200ER-300 Total    
European airlines                            
Air Berlin         6             6    
Hapag-Lloyd         3             3    
KLM         5 1           6    
Lauda     2 4         2     8    
TAROM       4 4             8    
Transavia         4             4    
European total 0 0 2 8 22 1 0 0 2 0 0 35    
North American airlines                            
Alaska       13               13    
American Airlines         3             3    
American Trans Air               1       1    
Atlas Air             2         2    
Delta         43     9 2 2   56    
Midway       15               15    
Southwest       12               12    
North American total 0 0 0 40 46 0 2 10 2 2 0 102    
Asian airlines                            
Air New Zealand   1                   1    
Cathay Pacific             2         2    
China Airlines             13         13    
EVA Airways             3         3    
Jet Airways         10             10    
Korean Air             2         2    
Singapore Airlines                   10   10    
Asian total 0 1 0 0 10 0 20 0 0 10 0 41    
Latin American airlines                            
COPA       8               8    
LAN Chile                 1     1    
Latin American total 0 0 0 8 0 0 0 0 1 0 0 9    
African and Middle East airlines                          
El Al                   3   3    
                           
African and Middle East total 0 0 0 0 0 0 0 0 0 3 0 3    
Lessors                            
CIT Group       10               10    
GATX       4 5   5 2 17     33    
GECAS             5   15     20    
ILFC       50 1             51    
Pembroke 15                     15    
Lessors total 15 0 0 64 6 0 10 2 32 0 0 129    
All undisclosed orders 0 0 3 36 16 1 1 8 10 3 2 80    
                             
TOTAL ORDERS 15 1 5 148 100 2 33 20 47 18 2 391    
                             
AIRBUS FIRM ORDERS 1999
AIRBUS FIRM ORDERS 1999
  A318 A319 A320 A321 A330 A330 A330 A340 A340 A340 A340 Total
          TBA -200 -300 TBA -300 -500 -600  
European airlines                        
Aero Lloyd     1 2               3
Air 2000     2 2               4
Air France 15             1       16
Airtours         3             3
British Airways 12                     12
Eurowings   1                   1
GB Airways     2                 2
Iberworld     2                 2
Lufthansa     3           8     11
Spanair     10 4               14
Swissair/Flightlease     7     3           10
                         
European total 27 1 27 8 3 3 0 1 8 0 0 78
North American airlines                        
America West 15   12                 27
Jet Blue     25                 25
Northwest   18 12                 30
TWA 25                     25
US Airways     26   3             29
North American total 40 18 75 0 3 0 0 0 0 0 0 136
Asian airlines                        
Air China 8                     8
Air Lanka           3           3
Cathay Pacific             3         3
China Airlines                 7     7
Singapore Airlines                   5   5
                         
Asian total 8 0 0 0 0 3 3 0 7 5 0 26
Latin American airlines                        
Aerolineas Argentinas                     6 6
LAN Chile     2           7     9
Latin American total 0 0 2 0 0 0 0 0 7 0 6 15
African and Middle East airlines                      
Egyptair 3                     3
Emirates         1             1
Africa/Middle East total 3 0 0 0 1 0 0 0 0 0 0 4
Lessors                        
CIT Group   7 18     5           30
debis AirFinance   11 15 5               31
Flightlease               2       2
GATX Flightlease 12   10 10 6             38
GECAS   11 12 4               27
ILFC 30 16 4 10               60
SALE     20 3               23
Lessors total 42 45 79 32 6 5 0 2 0 0 0 211
All undisclosed orders 0 1 0 0 5 0 0 0 0 0 0 6
                         
TOTAL ORDERS 120 65 183 40 18 11 3 3 22 5 6 476
OTHER MANUFACTURERS FIRM ORDERS 1999
OTHER MANUFACTURERS FIRM ORDERS 1999
  ERJ ERJ ERJ ERJ CRJ CRJ CRJ CRJ RJ Do- Do- Do- Total
  -135 -145 -170 -190-200 -100 -200 -200LR -700 -100 28Jet 428Jet 728Jet
European airlines                          
Adria Airways           1             1
Aegean Aviation                 4       4
Air Vallee/Locat                   1     1
Alitalia Express   6                     6
Cimber Air           2             2
City Airlines 1                       1
CityFlyer Express                 3       3
Crossair   15 30 30                 75
Jersey European           4             4
KLM excel   3                     3
LOT   6                     6
Lufthansa                       60 60
Maersk Air           4 1 3         8
Proteus 5 8                     13
Regional     10                   10
Rheintalflug   2                     2
Skyways   2                     2
Tyrolean           2             2
European total 6 42 40 30 0 13 1 3 7 1 0 60 203
North American airlines                        
Air Wisconsin             5           5
Atlantic Coast Airlines           23       50 30   103
Inter Canadian   6                     6
Midway         3               3
Northwest Airlines             54           54
Ozark                   2     2
SkyWest Airlines           30 25           55
North American total 0 6 0 0 3 53 84 0 0 52 30 0 228
Asian airlines                          
Hainan Airlines                   19     19
Shandong           5             5
Sichuan Airlines   5                     5
Asian total 0 5 0 0 0 5 0 0 0 19 0 0 29
Latin American airlines                        
Latin American total 0 0 0 0 0 0 0 0 0 0 0 0 0
African and Middle East airlines                      
Palestinian Airlines           2             2
African & M. East total 0 0 0 0 0 2 0 0 0 0 0 0 2
Lessors                          
Lessors total 0 0 0 0 0 0 0 0 0 0 0 0 0
All undisclosed orders 0 0 0 0 0 0 0 0 0 0 0 0 0
                           
TOTAL ORDERS 6 53 40 30 3 73 85 3 7 72 30 60 462

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